Litigation Trending: A comfortable ride - English courts may be the 'Tesla' of litigation but does that matter?
24 October 2023
24 October 2023
The High Court has declined to exercise jurisdiction in a high profile ESG supply chain claim. It concluded that England is not the most suitable forum (forum non conveniens) for the claim.
The judgment in Limbu and others v Dyson Technology provides an important insight into how the courts will determine the success of a type of jurisdictional challenge unavailable before Brexit.
The Claimants in the proceedings are Mr Limbu and 22 other migrant workers from Nepal and Bangladesh. The workers were employed at a factory in Malaysia which manufactured Dyson-branded products and were allegedly subject to various wrongdoings. The proceedings are brought against three entities in the Dyson Group: two domiciled in England, the third domiciled in Malaysia. The Claimants allege, among other things, negligence and unjust enrichment on the part of the Defendants by virtue of the control they allegedly exercised over their supply chain.
The claim was brought in the High Court, but the Defendants challenged jurisdiction, arguing that the more suitable and proper forum for the proceedings is Malaysia.
Prior to Brexit, the English courts were unable to decline to exercise jurisdiction over English-domiciled defendants on forum non conveniens grounds: the EU's Recast Brussels Regulation did not allow them to do so. However, for claims issued since 1 January 2021, the Recast Regulation does not apply. Therefore, forum non conveniens arguments are potentially available to English-domiciled defendants.
The Court's task is to determine the forum where the case can most suitably be tried for the interests of all the parties and the ends of justice. This involves a two-stage test set out in The Spiliada [1987] 1 AC 460:
The Court's role is not to exercise discretion but instead to carry out "an evaluative or balancing exercise", weighing up the various factors for and against accepting jurisdiction.
Mr Sheldon KC (sitting as a Deputy High Court Judge) held that many of the factors to be considered were neutral as between England and Malaysia. Neither forum would be practically convenient for all parties, documents and witnesses were located in both jurisdictions, and there was a real risk of duplication of proceedings wherever the claim was heard because of separate defamation proceedings brought by the Defendants in the English courts and potential claims against the Malaysian Police in the Malaysian courts.
What tipped the scales in favour of Malaysia, however, was (i) Malaysia being the place where the alleged treatment took place and (ii) Mr Sheldon KC's view that "Malaysian law is also the governing law, and there are good policy reasons for letting Malaysian judges consider the novel points of law that are being raised in this claim within the context of their jurisprudence, rather than letting an English Court second guess what they might decide."
At Stage 2, the Claimants argued that they would not be able to obtain substantial justice in Malaysia, including because of:
Mr Sheldon KC was unconvinced by these arguments. The Defendants had offered to pay a significant proportion of the disbursements and adduced evidence (which Mr Sheldon KC found persuasive) from a Malaysian lawyer who was willing to take on the claims under a suitable fee structure. He found that "there is no real risk that the Claimants will not be able to obtain legal representation and necessary NGO funding to pursue their claims in Malaysia", and that even if the level of service was not the same as in England "there is no real risk that they will be unable to source suitably qualified and expert legal representatives to take on their case in Malaysia".
Authors: Aaron Marchant, Associate; Jon Gale, Partner; Tom Cummins, Partner
The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to.
Readers should take legal advice before applying it to specific issues or transactions.